Japan, Vietnam agree to boost defence, economic, energy ties

Japanese Prime Minister Yoshihide Suga, in his first summit foray since taking office last month, agreed with his Vietnamese counterpart to step up defence and security cooperation in the face of China's expanding influence in the region.

In talks in Hanoi on Monday, Suga and Vietnamese Prime Minister Nguyen Xuan Phuc set a basic agreement allowing Japan to export defence equipment and technology to Vietnam.

The deal was expected: Japan has been pursuing such agreements in recent years to bolster ties with Southeast Asia and provide a lifeline to its own defence industry.

Suga arrived in Hanoi late Sunday on the first stop of a four-day visit to Vietnam and Indonesia that he says is key to pursuing the “free and open Indo-Pacific” vision for multilateral economic and security cooperation to counter China's growing power and protect sea lanes in disputed areas of the South China Sea.

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“Vietnam is crucial to achieving our vision of 'the Free and Open Indo-Pacific,' and our valuable partner,'” Suga told a joint news conference after his hour-long meeting with Phuc. “

Japan, as an Indo-Pacific nation, will continue to contribute to the peace and stability in this region.” Suga said Vietnam, at the center of the Indo-Pacific, was the most suitable destination for his first trip abroad as Japan's leader.

Japan already has defence equipment transfer deals with the US, Britain, the Philippines and Malaysia, among other countries. Vietnam is a 12th partner.

Suga called the agreement “a major step” for bilateral defence cooperation, saying he expects further developments. Details of possible equipment sales were not mentioned.

Japan most recently exported a radar surveillance system to the Philippines in August.

Suga and Phuc also signed agreements on cooperation in wide range of areas from economic cooperation including infrastructure, energy, environment and agricultural trade.

Japan is one of Vietnam's top trading partners with two-way trade of $28.6 billion so far this year. Japan is also Vietnam's largest overseas aid donor, providing $23 billion as of 2019 and accounting for more than a quarter of Vietnam's foreign loans.

The government has been trying to entice Japanese companies to invest in Vietnam and other Southeast Asian countries to leaven the country's dependence on manufacturing and other businesses in China.

In August, Vietnam agreed to buy six coast guard patrol boats worth $345 million from Japan to increase its maritime capacity. That deal comes amid China's continuing development and militarization of artificial islands in the contested waters of the South China Sea.

Suga's predecessor Shinzo Abe also chose Vietnam to be the first country he visited after taking office. Suga is the first foreign head of a state to visit Vietnam since the country closed its borders to contain Covid-19.